Founders - you'll likely start out fundraising on SAFEs.
But as your business passes fundraising stages, you'll encounter more and more convertible notes.
Data below is a snapshot from the last 6 months. Black bar is percentage of SAFEs, blue bar is percentage of convertible notes. Total SAFEs/Notes signed on the top.
(Obviously this doesn't show the priced round data, just focused on convertible financings for this one)
𝗖𝗼𝘂𝗽𝗹𝗲 𝗸𝗲𝘆 𝘁𝗮𝗸𝗲𝗮𝘄𝗮𝘆𝘀
SAFEs continue to dominate pre-priced round investing in the US. Even some more capital-intensive industries like Biotech have trended more towards SAFEs lately.
Convertible Notes quickly regain the lead by Series A or so.
Lots more funding flowing through either kind of convertible instrument than there used to be!
But why? Why are companies (and VCs) using these convertible instruments so much in between priced rounds?
Could be that it's quicker and easier to complete a bridge financing this way. Could be an avoidance of legal cost.
Could also be that bridge or extension funding through a convertible is a good way to avoid a tricky or depressing conversation about a down round as well 😬
#cartadata #SAFEs #ConvertibleNotes #fundraising #founders
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